Debt Relief Orders (DROs) set to soar as pension changes come into effect 6^th April 2011

Edward Davey, Minister for Employment Relations, Consumer and Postal Affairs has announced changes to the Debt Relief Orders to allow those debtors with approved pensions access to the DRO procedure.

Previously any debtor that had a pension fund worth £300 or more was excluded from proposing a DRO to their creditors, even if the pension is not receivable for many years.

The announcement follows a consultation launched in March this year, after debt advice agencies expressed concerns that DROs excluded some vulnerable people struggling with small debts.

The proposals which will come into force on 6^th April 2011 will change the rules to allow approved pensions as defined under Section 11 (2) of the Welfare Reform and Pensions Act 1999. This means that the majority of occupational and personal pension schemes will now be accepted.

More on this in Mike's blog including key stats since DROs launched April 2009, how DROs can be a disincentive to work and Mike's recommendations to improve the qualifying criteria;

Government gives date for radical changes in Debt Relief Orders DROs blog

DebtWizard guide to Debt Relief Orders (DROs)